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CEB GM forwards draft agreement giving exclusive rights to Chinese company

Published

4 years ago

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Supply of natural gas to power plants

By Ifham Nizam

The Ceylon Electricity Board (CEB) General Manager has forwarded a draft agreement to the Ministry of Finance recommending that exclusive rights be granted to a Chinese company for supplying natural gas (regasified LNG) to power plants at Kerawalapitiya and Kelanitissa.

The CEB invited international bids in February 2021 for the development of a floating storage and regasification unit (FSRU) at Kerawalapitiya on build, own and operate (BOO) basis on a 10-year contract.

Under this tender, the FSRU stationed offshore at Kerawalapitiya will regasify the natural gas delivered by ship in liquid form (LNG) and then deliver it to power plants at Kerawalapitiya and Kelanitissa through gas delivery pipelines to be constructed under a separate tender floated by the Ceylon Petroleum Corporation.

The CEB has engaged an Indian consulting firm using funds provided by the Asian Development Bank (ADB) to prepare the request for proposal (RFP) documents of this tender, which includes the FSRU agreement and the implementation agreement (IA).

The FSRU agreement is to be signed between the CEB and the project company that would be set up by the selected bidder. The IA is an agreement signed between the project company and the Sri Lankan government, which sets out terms on which the government will provide incentives (such as tax concessions) and assistance (for obtaining statutory approvals such as environmental permits) to the prospective project company.

Under the IA, the GOSL will guarantee the payment due to the project company from the CEB under the FSRU agreement. The IA published with the RFP in February 2021 has not offered exclusivity to bidders, as it is unnecessary to offer such a guarantee since the FSRU agreement will ensure that the project company will operate the FSRU for 10 years.

The bids were closed on 25 June 2021, and the CEB has received only two bids despite some 18 companies purchasing the bidding documents.

The CEB Engineers’ Union (CEBEU) at the time claimed that potential investors had been discouraged by the government’s decision to entertain an unsolicited proposal by the US Company New Fortress Energy (NFE) to supply LNG to two private power plants in Kerawalapitiya including the FSRU and delivery pipeline.

However, according to a senior CEB engineer, this allegation was baseless because another international tender for a combined cycle power plant at Kerawalapitiya published around the same time attracted only a single bid. Industry experts blame international developers’ lack of interest in the dire financial situation in the country that existed at the time.

Out of the two bids received, the offer submitted by a leading US firm that owns and operates a large fleet of FSRUs was rejected by the technical evaluation committee (TEC) because the bidder had sought to conduct on its own expense a complete hydrological study of the offshore location assigned for the FSRU.

Some experts, contacted by The Island agreed that such studies were required for designing the offshore mooring system of the FSRU, which is one of the most critical items in the FSRU operation.

They were of the opinion that it was not usual for FSRU developers to rely on preliminary studies conducted by a third party because mooring system design is a highly specialised job that was not entrusted to unknown parties. However, the CEB has refused the bidder’s request, citing the urgency of implementing this project as the proposed study would take approximately two months. Accordingly, the bid has been rejected without further consideration.

However, despite CEB’s claim of urgency, the TEC is yet to complete the evaluation of the single bid and award the tender, 14 months after the bids were closed. The then CEBEU President Saumya Kumarawadu told The Island in September 2021 that the CEB’s tender was based on a comprehensive feasibility study carried out by experts and the tender was in its final stage of evaluation.

He expressed confidence that the CEB would soon select a suitable investor through a transparent and competitive bidding process, to procure the LNG infrastructure to supply LNG for all existing and future power plants in the country at the most competitive prices.

The TEC has accepted the only remaining offer received from a Chinese company, which is already engaged in road construction contracts in Sri Lanka, submitted in partnership with the Pakistani supplier of the FSRU. It is understood that this “qualifying offer” had quoted a price that is nearly twice that of the offer rejected by the TEC.

Based on the prices offered in the two bids received and the total LNG throughput guaranteed by the CEB in the RFP for the FSRU operation (443 million MMBtu for the 10-year period), the Chinese offer would cost around USD 560 million more than the offer of the US company over the 10-year contract term.

Because of the substantially high price quoted by the selected bidder, it has been decided to negotiate with the bidder with a view to reducing the price. Although the government tender guidelines allow negotiating the price with the selected bidder, they do not permit amendments to original commercial conditions or technical specifications during price negotiations in BOO/BOT projects. However, it is understood that the TEC has agreed to several material changes to the bid conditions including the bidder’s demand to change the designated location of the FSRU, a request adamantly rejected by the CEB during tendering.

The CEB has turned down repeated requests from potential bidders during the pre-bid meetings to change the location of the FSRU specified in the RFP. These parties have claimed that the location specified in the RFP did not have sufficient depth of water needed to float the FSRU.

Industry experts contacted by The Island believed that the CEB’s refusal to change the location may have resulted in the CEB ending up with only two bids. In any event, changing the assigned location of the FSRU is a material deviation from the original tender conditions, especially since the CEB has been clear from the beginning that this change could not be allowed.

The amended IA forwarded by the CEB General Manger is believed to contain several other unfavourable conditions not included in the original IA published with the RFP.

One such amendment is the GOSL’s undertaking to grant exclusive rights to the Chinese company for FSRU operation and delivery of gas to power plants for 10 years. Such a condition will effectively give this company full control of gas supply to nearly 2000 MW of generation capacity in the country, regardless of who supplies LNG.

Ironically, the strong opposition by the CEBEU to the proposal by the US company NFE was based on the allegation that NFE would be given a five-year monopoly for LNG supply in the country under that proposal.

It is also understood that the amended IA has added a new section that will effectively prevent the proposed restructuring of the CEB. Some question whether this is a clever ploy by the CEB engineers, who are opposed to the government’s restructuring of the CEB, to force the GOSL to abandon its reform process.

It is also understood that the amended IA has shifted the burden of obtaining numerous governmental and statutory approvals to the GOSL and CEB. Obtaining such approval is the Project Company’s obligation and the government generally agrees in the IA to provide reasonable assistance.

A senior CEB official contacted by The Island agreed that changing mandatory tender conditions after the award was made would be unlawful and likely to be challenged in court. He stated further that it would be most unlikely that the Ministry of Finance would agree to the changes proposed in the amended IA forwarded by the CEB, as some of these conditions may impinge on the rights of the government.


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Advisory for Severe Lightning issued For Western, Sabaragamuwa and North-western province

Published

5 hours ago

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2026/04/25

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Advisory for Severe Lightning
Issued by the Natural Hazards Early Warning Centre
Issued at 12.00 noon 25 April 2026 valid for the period until 11.30 p.m. 25 April 2026

Thundershowers accompanied with severe lightning are likely to occur in the  Western, Sabaragamuwa and North-western provinces and Galle, Matara, Kandy and Nuwara-Eliya
districts after 1.00 p.m.

There may be temporary localized strong winds during thundershowers. General public is kindly requested to take adequate precautions to minimize damages caused by lightning
activity.

ACTION REQUIRED:
The Department of Meteorology advises that
people should:
• Seek shelter, preferably indoors and never under trees.
• Avoid open areas such as paddy fields, tea plantations and open water bodies during thunderstorms.
• Avoid using wired telephones and connected electric appliances during thunderstorms.
• Avoid using open vehicles, such as bicycles, tractors and boats etc.
• Beware of fallen trees and power lines.
• For emergency assistance contact the local disaster management authorities.

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AI chatbots could be making you stupider

Published

11 hours ago

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2026/04/25

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As large language models take over more and more cognitive tasks, researchers are warning this mental outsourcing comes with a cost.

When research scientist Nataliya Kosmyna was looking for interns, she noticed that cover letters she received were suspiciously similar. They were long, polished and after introductions would often jump to an abstract and arbitrary connection to her work.

It was obvious to her that applicants were using large language models (LLMs) – a form of artificial intelligence that powers chatbots such as ChatGPT, Google Gemini and Claude – to write the letters.

At the same time, during lessons on campus at Massachusetts Institute of Technology (MIT), Kosmyna, who studies the interaction between humans and computers, noticed that numerous students were forgetting content more easily compared to a few years ago.

With the increasing reliance on LLMs, she had a hunch that this could be affecting her students’ cognition and sought to understand more.

The concern that researchers like Kosmyna have is that if we become too reliant on AI, it could affect the language we use and even our ability to do basic cognitive tasks. There is now a growing body of research suggesting that this “cognitive offloading” to AI can have a corrosive effect on our mental abilities. The consequences could be alarming and may even contribute to cognitive decline.

“The ChatGPT group showed notably less brain activity – it was reduced by up to 55%”

It’s well known that the tools we use can change how we think. With the advent of the internet for instance, tasks that once required deep research could be found by plugging a simple query into a search box. As the use of search engines increased, research found we became less likely to remember details, something dubbed “the Google effect”. (Some argue, however, the internet also serves as an external memory system that frees up our brain to do other tasks)

But there is now growing alarm that as we offload even more of our thinking to LLMs and other forms of AI, the effects on our memories and ability to solve problems could get worse. Artificial intelligence tools can write convincing poetry, give financial advice and provide companionship.  Students are increasingly outsourcing their own work to AI tools as well.

Studies have already shown that young people might be particularly vulnerable to the negative effects that using AI can have on key cognitive skills like critical thinking.  Kosmyna, however, wanted to dig deeper into the potential effects.

Reduced mental effort

She and her colleagues at MIT Media Lab recruited 54 students to write short essays and split them into three groups. One was instructed to use ChatGPT. A second could use Google search, with AI-generated summaries turned off. The third didn’t use technology. Each student’s brainwaves were measured while they worked.

The essay topics were deliberately open-ended, meaning little research was needed for the task, with prompts including questions around loyalty, happiness or our daily life choices.

The results haven’t been published in a scientific journal yet, but they were none-the-less eye-opening, according to Kosmyna. Those who used their own minds had a brain that was “on fire”, showing widespread activity across many parts of the brain, she says. The search engine-only group still showed strong activity in the visual parts of the brain, but the ChatGPT group showed notably less brain activity – it was reduced by up to 55%.

“The brain didn’t fall asleep, but there was much less activation in the areas corresponding to creativity and to processing information,” says Kosmyna.

ChatGPT also affected people’s memories. After submitting their essays, people in the AI group were unable to quote from their essays, and several felt they had no ownership over the work. Other studies have also shown that people become less able to retain and recall information when they use AI tools such as ChatGPT.

While the findings are still undergoing peer review, they echo those from other studies. One study by researchers at the University of Pennsylvania suggests that some people undergo something they term “cognitive surrender” when using generative AI chatbots. This means they tend to accept what the AI tells them with minimal scrutiny and even allow it to override their own intuition.

Similar effects can be found outside the world of AI chatbots too – even in life-or-death situations. A recent multinational study team found that medical professionals who used an AI tool to screen for colon cancer for three months were subsequently worse at spotting the tumours without it.

Getty Images Researchers have growing concerns about the harms that rapid adoption of AI might be causing (Credit: Getty Images)
Researchers have growing concerns about the harms that rapid adoption of AI might be causing (BBC)

 

Outsourcing work to AI also risks losing much of the creativity that produces original work, warns Kosmyna. The essays that students in her study wrote with ChatGPT looked very similar and were described by the teachers marking them as “soulless”, lacking originality and depth, Kosmyna says. “One of the teachers asked if students were sitting next to each other because the essays were so similar.”

While studies such as these illustrate the short-term effects LLMs can have on the brain, the long-term impacts are far less clear. The study by Kosmyna and her colleagues provides a glimpse. Four months after the initial study they asked the students to write another essay, but this time those who had used ChatGPT were told to work without LLM support. The neural connectivity in their brains was lower than those who switched the opposite way, perhaps indicating that they had not engaged with the topics properly in the first place.

Cognitive decline

Yet, LLMs can be a positive tool to aid thinking, but only if we don’t rely on them by outsourcing our mental tasks in the process, says computational neuroscientist Vivienne Ming, author of Robot Proof. She’s concerned though that this is not how most people interact with this technology.

Her reasoning comes from research she conducted for her book, during which Ming asked a group of students at the University of Berkeley to predict real-world outcomes, such as the price of oil. She found that the majority of participants simply asked AI and copied the answer.

She measured their brains’ gamma wave activity – a marker of cognitive effort – finding it showed very little activation. Again her research is yet to published, but Ming worries that if her findings are borne out in further studies it could have long-term implications. Other research, for example, has linked weak gamma wave activity to cognitive decline later in life.

“That’s really worrying,” Ming says. “If that is a natural mode for people to interact with these systems – and these are smart kids – that’s bad.” Deep thinking, she says, is our superpower. “If we don’t use it, the long-term implications for cognitive health are pretty strong.”

That’s because when we rely on LLMs it requires very little cognitive effort, Ming adds, which is exactly what’s needed for a healthy brain.

A small subset of participants though – less than 10% – worked differently and used AI as a tool to gather data that they then analysed themselves. These individuals made more accurate predictions than others participants and showed stronger brain activation too.

For long-term brain health we need to continue to challenge ourselves

Almost two decades ago, Ming predicted that within 20 to 30 years we would see a statistically meaningful rise in dementia rates directly related to our overreliance on Google Maps. “I meant it to be provocative,” Ming says. “If you don’t have to think about navigating then there’ll be some detectable effect.”

While we don’t have data on this exact prediction, the increased use of GPS has been linked to worse spatial memory over time, according to one study of 13 people conducted over three years. And poor spatial navigation may be a potential predictor of Alzheimer’s Disease,  according to another study.

It’s clear that the more active our brain is, the more protected it is from cognitive decline. LLMs then, Ming says, could not only reduce creativity but could harm cognition and potentially increase the risk of dementia.

As AI tool use increases, we need to work with it in a way that benefits us rather than harms us. Ming suggests that ultimately, the goal could be a form of “hybrid intelligence” where humans and machines “do the hard stuff” together. By this she means we need to think first and use tools to challenge us later, rather than simply letting them answer questions for us. Kosmyna agrees and suggests learning subjects without AI tools first to build a foundation and then think about using LLMs.

Ming recommends using what she calls the “nemesis prompt” to challenge your own thinking. It works by prompting an AI to act as a “lifelong enemy” or nemesis, then ask it to explain in detail why your ideas are wrong and how you can fix them, forcing you to defend and refine your arguments rather than simply accepting the answers it provides.

Another technique she suggest is prioritising “productive friction” and asking the AI to only provide context and ask you questions, rather than supplying answers. When she tested this by fine-tuning an AI bot not to give answers, she found that more individuals were more engaged.

Ultimately, we should all be wary of cognitive shortcuts, which is something “our brains love”, Kosmyna says. Clearly, for long-term brain health we need to continue to challenge ourselves. Our minds, creativity and cognitive health will benefit in the process.

[BBC]

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Heat Index at Caution Level in the Northern, North-central, North-western, Western, Sabaragamuwa and  Eastern provinces during the day time

Published

13 hours ago

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2026/04/25

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Warm Weather Advisory
Issued by the Natural Hazards Early Warning Centre
Issued at 3.30 p.m. on 24 April 2026, valid for 25 April 2026.

Heat index, the temperature felt on human body is likely to increase up to ‘Caution level’ at some places in Northern, North-central, North-western, Western, Sabaragamuwa and
Eastern provinces during the day time.

The Heat Index Forecast is calculated by using relative humidity and maximum temperature and this is the condition that is felt on your body. This is not the forecast of maximum temperature. It is generated by the Department of Meteorology for the next day period and prepared by using global numerical weather prediction model data.


Effect of the heat index on human body is mentioned in the above table and it is prepared on the advice of the Ministry of Health and Indigenous Medical Services.

ACTION REQUIRED
Job sites: Stay hydrated and takes breaks in the shade as often as possible.
Indoors: Check up on the elderly and the sick.
Vehicles: Never leave children unattended.
Outdoors: Limit strenuous outdoor activities, find shade and stay hydrated.
Dress: Wear lightweight and white or light-colored clothing.

Note:
In addition, please refer to advisories issued by the Disaster Preparedness & Response Division, Ministry of Health in this regard as well. For further clarifications please contact 011-7446491.

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